Impact of Budget Support on Accountabilities at the Local Level in Indonesia

A thorough analysis of existing governance and accountability structures in a decentralised country is necessary before deciding to deliver development assistance directly to the regional level. This article examines the mechanism of donor-provided budget support at the local level in Indonesia and its potential impact on accountability structures. 2 Accountability is a key driver in the quest to deliver effective development outcomes. Donor-provided budget support offers a mechanism with which to deliver development assistance to a partner government that can promote accountability more so than traditional project-based aid. While some evaluations of budget support have assessed its impact on accountability, the evaluations and analyses have rarely examined the concept of accountability in all its complexity. This article unpacks the concept of accountability and argues that experiences in delivering budget support in one area, let alone one country, cannot simply be transposed to assume that budget support will improve accountability in a comparable way in another context. Accordingly, existing local accountability structures must be thoroughly examined in the context of broader political dynamics, particularly where budget support is provided in a decentralised country directly to the regional level of government. To demonstrate this, this article looks at one of Indonesia's 33 provinces, Gorontalo, in order to examine existing local dynamics and predict how these might be impacted upon with a donor providing budget support. Section 1 introduces the concept of budget support in its historical context and presents current trends in its provision. Section 2 explains what is meant by the nebulous concept of " accountability " and how this concept can play out in a decentralised country such as Indonesia. Section 3 briefly canvasses Indonesia's public financial management reforms, including reforms to the budfget process and the introduction of a new " on-granting " mechanism for budget support to regional governments. Section 4 delves into the detail of the particular public financial management context of Gorontalo, including examining the impacts on accountability of central government grants to regional governments. This information is used in Section 5 to draw valuable lessons for a donor providing budget support. This research is timely, given Indonesia's new regulations to govern the provision of budget support to regional governments and the increasing interest by donors in providing budget support. This article raises issues that would need to be carefully addressed in the design of a programme of assistance to ensure that budget support does not …